The role of growth and income distribution in poverty reduction the case of the south eastern asian countries

International Institute of Social Study University of Economics Erasmus University of Rotterdam, Ho Chi Minh City, Vietnam The Netherlands VIETNAM – THE NETHERLANDS PROGRAMME FOR M.A IN DEVELOPMENT ECONMICS THE ROLE OF GROWTH AND INCOME DISTRIBUTION IN POVERTY REDUCTION: THE CASE OF THE SOUTH-EASTRN ASIAN COUNTRIES by Hồ Quốc Tuấn A Thesis Submitted in Partial Fulfillment of the Requirements for the Degree of Master of Art in Development Economics Under the Supervision of Assoc Prof Dr Nguyễn Trọng Hoài Vietnam – Netherlands Programme, August 2013 International Institute of Social Study University of Economics Erasmus University of Rotterdam, Ho Chi Minh City, Vietnam The Netherlands VIETNAM – THE NETHERLANDS PROGRAMME FOR M.A IN DEVELOPMENT ECONMICS THE ROLE OF GROWTH AND INCOME DISTRIBUTION IN POVERTY REDUCTION: THE CASE OF THE SOUTH-EASTRN ASIAN COUNTRIES by Hồ Quốc Tuấn A Thesis Submitted in Partial Fulfillment of the Requirements for the Degree of Master of Art in Development Economics Under the Supervision of Assoc Prof Dr Nguyễn Trọng Hoài Vietnam – Netherlands Programme, August 2013 DECLARATION This is to certify that thesis entitled “The Role of Growth and Income Distribution in Poverty Reduction: The Case of South-Eastern Asian Countries”, which is submitted by me in fulfillment of the requirement for the degree of Master of Art in Development Economic to Vietnam-The Netherlands Programme The thesis comprises only my original work and due supervision and acknowledgement have been made in the text to all other material used Hồ Quốc Tuấn CERTIFICATION v ACKNOWLEDGEMENT I would not be possible to write this master thesis without the help and support of people surrounding me Above all, I am grateful to my supervisor, Assoc Prof Dr Nguyễn Trọng Hoài, for his helpful comments and supervisions This thesis research would not be feasible without the advices, supports and guidance from him I would like to acknowledge all the lecturers at the Vietnam – Netherlands Programme for their knowledge of all the courses, during the time I studied at the program Besides, I would like to thank all the academic and technical staffs of the Vietnam – Netherlands Programme for supporting me during that time I would like to express my gratitude to my family, especially my parents I would not complete this thesis, as well as study in this program, without their scarification, encouragement and important support Additionally, I am also grateful to my better half for her personal support and patience at all times, which accelerate my thesis writing process For the love and expectation of my family, which motivate my effort to complete this master degree, my mere expresses of gratitude here have never been sufficient Last, but not least, I thank my friends and people, who have any help and support for my thesis but are not above-mentioned vi ABBREVIATIONS FE Fixed Effect GDP Gross Domestic Product Gini Gini coefficient GLS Generalized Least Squares GNP Gross National Product MDG Millennium Development Goal OLS Ordinary Least Squares P1 Poverty Headcount ratio P2 Poverty gap index P3 Poverty squared gap index RE Random Effect vii ABSTRACT This thesis research contributes to exploring the impact of economic growth and inequality on poverty In detail, this research aims to identify the effect of income growth on poverty and the impact of inequality on the rate at which growth reduces poverty This research use unbalanced-panel data for South-Eastern Asian countries in the period from 1981 to 2010 The research argues that for all three measures of poverty, i.e headcount ratio (P0), poverty gap (P0) and poverty squared gap (P2) income growth has a significant and negative impact on poverty The estimated growth elasticity of poverty for the whole region is -3.25 for P0, -4.00 for P1 and -4.47 for P2 Additionally, inequality as well as the level of initial inequality is found to affect the impact of income growth on poverty reduction significantly Higher inequality as well as higher initial level of inequality decelerates the growth elasticity of poverty in absolute value Finally, the impacts of income growth and inequality are larger on the more sensitive measures of poverty viii TABLES OF CONTENTS LIST OF TABLES xi LIST OF FIGURES .xii Chapter INTRODUCTION 1.1 Problem Statement 1.2 Research Objectives 1.3 Research Questions 1.4 Research Scope and Data 1.5 Organization of the Thesis Chapter LITERATURE REVIEW 2.1 Definitions 2.1.1 Poverty 2.1.2 Economic Growth 2.1.3 Inequality 2.2 The Important Role of Economic Growth in Poverty Reduction 2.3 Growth and Redistribution Components of Poverty Reduction 10 2.4 The Impact of Inequality on the Responsiveness of Poverty to Growth 12 2.5 Analytical Framework 15 2.6 Chapter Remark 16 Chapter RESEARCH METHODOLOGY 18 3.1 Model Specification 18 3.2 Research Hypothesis 21 3.3 Measurements of Variables 22 ix 3.3.1 Poverty 22 3.3.2 Inequality 23 3.3.3 Income 25 3.3.4 Initial Inequality and Initial Income or Consumption 25 3.3.5 Growth Rate of Poverty, Income and Inequality 25 3.4 Data Collection 26 3.5 Estimation Strategy 27 3.5.1 The Constant Coefficients Model 27 3.5.2 Random Effects Regression Model 28 3.5.3 Fixed Effects Regression Model 28 3.5.4 Choosing between the FE Model and RE Model: The Hausman Specification Test 29 3.6 Chapter Remark 30 Chapter DATA ANALYSIS 31 4.1 South-Eastern Asian Countries: An Overview on Poverty, Income and Inequality 31 4.2 Poverty, Income Growth and Inequality: The Interrelationship 32 4.3 Empirical Results 35 4.3.1 Estimation Process 35 4.3.2 Choosing the Most Appropriate Model 36 4.3.3 Discussions on the Research Results 37 4.4 Estimating the Growth Elasticity of Poverty 41 4.5 Chapter Remark 43 x Chapter CONCLUSION AND POLICY IMPLICATION 44 5.1 Conclusion 44 5.2 Policy Implication 45 5.3 Limitation and Suggestion of Further Research 46 REFERENCES 48 APPENDIX A: DESRRIPTION OF THE DATASET 53 APPENDIX B: DESCRIPTIVE STATISTICS OF VARIABLES 59 APPENDIX C: RESULTS OF HAUSMAN TEST 62 APPENDIX D: REGRESSION RESULTS 65 APPENDIX E: ESTIMATION OF GROWTH ELASTICITY OF POVERTY 68 55 Country Year Type Indonesia 1987 Indonesia Mean Gini Headcount Poverty Gap Squared Gap Initial Income Initial Gini Coefficient Ratio Index Index Coefficient Consumption 36.08 29.27 68.16 23.14 10.11 38.26 30.47 1984 Consumption 38.26 30.47 62.84 21.36 9.57 38.26 30.47 Lao DPR 2008 Consumption 62.93 36.74 33.88 8.95 3.33 43.30 30.43 Lao DPR 2002 Consumption 51.08 32.63 43.96 12.11 4.55 43.30 30.43 Lao DPR 1997 Consumption 49.06 34.91 49.32 14.85 6.07 43.30 30.43 Lao DPR 1992 Consumption 43.30 30.43 55.68 16.24 6.22 43.30 30.43 Malaysia 2009 Income 399.76 46.21 0.00 0.00 0.00 241.67 48.63 Malaysia 2007 Income 374.49 46.00 0.00 0.00 0.00 241.67 48.63 Malaysia 2004 Income 204.31 37.91 0.54 0.06 0.01 241.67 48.63 Malaysia 1997 Income 328.17 49.15 0.54 0.05 0.01 241.67 48.63 Malaysia 1995 Income 263.29 48.52 2.08 0.26 0.05 241.67 48.63 Malaysia 1992 Income 253.06 47.65 1.62 0.14 0.02 241.67 48.63 Malaysia 1989 Income 228.00 46.17 1.91 0.29 0.08 241.67 48.63 Malaysia 1987 Income 233.14 47.04 2.39 0.36 0.09 241.67 48.63 56 Gini Country Year Type Mean Malaysia 1984 Income 241.67 48.63 Philippines 2009 Philippines Headcount Poverty Gap Squared Gap Coefficient Ratio Initial Income Initial Gini Index Index Coefficient 3.22 0.66 0.23 241.67 48.63 Consumption 103.65 42.98 18.42 3.72 1.00 68.82 41.04 2006 Consumption 98.99 44.04 22.62 5.48 1.74 68.82 41.04 Philippines 2003 Consumption 101.51 44.48 21.99 5.52 1.83 68.82 41.04 Philippines 2000 Consumption 103.16 46.09 22.45 5.48 1.76 68.82 41.04 Philippines 1997 Consumption 104.88 46.16 21.61 5.25 1.68 68.82 41.04 Philippines 1994 Consumption 83.45 42.89 28.11 7.60 2.70 68.82 41.04 Philippines 1991 Consumption 80.88 43.82 30.68 8.57 3.13 68.82 41.04 Philippines 1988 Consumption 74.98 40.63 30.48 8.15 2.87 68.82 41.04 Philippines 1985 Consumption 68.82 41.04 34.90 10.27 3.99 68.82 41.04 Thailand 2010 Consumption 220.34 39.37 0.38 0.04 0.01 101.95 45.22 Thailand 2008 Consumption 210.46 40.51 0.37 0.04 0.01 101.95 45.22 Thailand 2006 Consumption 209.10 42.35 1.01 0.18 0.05 101.95 45.22 Thailand 2002 Consumption 171.08 41.98 1.64 0.29 0.09 101.95 45.22 57 Mean Gini Country Year Type Thailand 2000 Consumption 157.63 42.84 Thailand 1999 Thailand Headcount Poverty Gap Squared Gap Coefficient Ratio Initial Income Initial Gini Index Index Coefficient 3.04 0.50 0.13 101.95 45.22 Consumption 161.17 43.09 3.17 0.46 0.10 101.95 45.22 1998 Consumption 163.63 41.46 2.07 0.33 0.09 101.95 45.22 Thailand 1996 Consumption 169.45 42.90 2.48 0.41 0.10 101.95 45.22 Thailand 1994 Consumption 150.65 43.47 4.11 0.74 0.20 101.95 45.22 Thailand 1992 Consumption 143.41 47.86 8.60 1.56 0.46 101.95 45.22 Thailand 1990 Consumption 119.09 45.27 11.55 2.36 0.74 101.95 45.22 Thailand 1988 Consumption 106.58 43.84 17.20 3.43 0.92 101.95 45.22 Thailand 1981 Consumption 101.95 45.22 21.92 5.51 1.83 101.95 45.22 Timor-Leste 2007 Consumption 55.41 31.93 37.44 8.88 2.91 49.18 39.52 Timor-Leste 2001 Consumption 49.18 39.52 52.94 19.13 8.90 49.18 39.52 Vietnam 2008 Consumption 85.31 35.57 16.85 3.75 1.24 40.07 35.68 Vietnam 2006 Consumption 79.05 35.75 21.42 5.30 1.87 40.07 35.68 Vietnam 2004 Consumption 70.79 36.81 28.25 7.21 2.46 40.07 35.68 58 Country Year Type Vietnam 2002 Vietnam Vietnam Mean Gini Headcount Poverty Gap Squared Gap Initial Income Initial Gini Coefficient Ratio Index Index Coefficient Consumption 59.72 37.55 40.05 11.20 4.09 40.07 35.68 1998 Consumption 49.79 35.52 49.65 15.05 5.95 40.07 35.68 1992 Consumption 40.07 35.68 63.74 23.57 11.01 40.07 35.68 Source: ‘PovcalNet: the online tool for poverty measurement developed by the Development Research Group of the World Bank’ 59 APPENDIX B: DESCRIPTIVE STATISTICS OF VARIABLES Table B-1 Summary statistics of poverty, income and inequality: Whole Region Variable Obs Mean Std Dev Min Max p0 56 24.86161 19.65108 37 68.16 p1 56 6.795179 6.410411 04 23.57 p2 56 2.555357 2.781897 01 11.01 Y 58 121.3622 86.13955 36.08 399.76 gY 58 1.931183 1.515928 -1.936546 4.972931 G 58 39.70655 5.912587 28.99 49.15 Source: Author’s calculations 59 60 Table B-2 Summary statistics of poverty, income and inequality: Individual Country Country Cambodia Indonesia Lao DPR Malaysia Philippines Variable Obs Mean Std Dev Min Max p0 31.154 10.60923 18.6 44.5 p1 7.642 3.530619 3.51 11.95 p2 2.542 1.399257 96 4.29 Y 72.064 10.12687 56.54 80.48 gY 1.791398 1.047346 2.519097 G 39.676 3.366613 36.03 44.37 p0 10 42.22 18.22257 18.06 68.16 p1 10 11.837 7.134721 3.3 23.14 p2 10 4.587 3.361002 81 10.11 Y 10 55.225 16.73458 36.08 83.33 gY 10 1.723209 1.603672 -1.936546 3.286494 G 10 31.199 2.457724 28.99 35.57 p0 45.71 9.227574 33.88 55.68 p1 13.0375 3.220201 8.95 16.24 p2 5.0425 1.36839 3.33 6.22 Y 51.5925 8.245821 43.3 62.93 gY 1.639905 1.155506 2.529285 G 33.6775 2.741136 30.43 36.74 p0 1.757143 970373 54 3.22 p1 26 2118962 05 66 p2 07 0776745 01 23 Y 280.6544 69.54345 204.31 399.76 gY 5013626 1.398335 -1.190656 2.381442 G 46.36444 3.378603 37.91 49.15 p0 25.69556 5.495865 18.42 34.9 p1 6.671111 2.076623 3.72 10.27 p2 2.3 9307524 3.99 60 61 Country Thailand Timor-Leste Vietnam Variable Obs Mean Std Dev Min Max Y 91.14667 14.06529 68.82 104.88 gY 2.194432 1.013426 3.573384 G 43.57 1.937298 40.63 46.16 p0 13 5.964616 6.902907 37 21.92 p1 13 1.219231 1.638325 04 5.51 p2 13 3638462 5267279 01 1.83 Y 13 160.3492 37.73632 101.95 220.34 gY 13 2.351309 1.001217 3.445187 G 13 43.08923 2.194294 39.37 47.86 p0 45.19 10.96016 37.44 52.94 p1 14.005 7.247844 8.88 19.13 p2 5.905 4.235569 2.91 8.9 Y 52.295 4.405275 49.18 55.41 gY 1.003887 1.419711 2.007774 G 35.725 5.366941 31.93 39.52 p0 36.66 17.93868 16.85 63.74 p1 11.01333 7.40085 3.75 23.57 p2 4.436667 3.642327 1.24 11.01 Y 64.12167 17.43285 40.07 85.31 gY 3.73716 1.900989 4.972931 G 36.14667 8378225 35.52 37.55 Source: Author’s calculations 61 62 APPENDIX C: RESULTS OF HAUSMAN TEST Table C-1 Result of Hausman Test for Equation (4.1a) Coefficients (b) (B) FEp0 REp0 y g Gi_y Yi_g -.6932427 0048449 0591558 8637231 (b-B) Difference 355342 -.5781765 -2.54313 1.825156 -1.048585 5830214 2.602286 -.9614327 sqrt(diag(V_b-V_B)) S.E .385889 5328493 9450854 3301061 b = consistent under Ho and Ha; obtained from xtreg B = inconsistent under Ha, efficient under Ho; obtained from xtreg Test: Ho: difference in coefficients not systematic chi2(4) = (b-B)'[(V_b-V_B)^(-1)](b-B) = 21.84 Prob>chi2 = 0.0002 Table C-2 Result of Hausman Test for Equation (4.1b) Coefficients (b) (B) FEp1 REp1 y g Gi_y Yi_g -1.411785 6601898 1.98817 2311069 (b-B) Difference -.0899226 0208372 -1.271639 1.429908 -1.321863 6393526 3.259809 -1.198802 sqrt(diag(V_b-V_B)) S.E .4548546 6280795 1.11399 3891023 b = consistent under Ho and Ha; obtained from xtreg B = inconsistent under Ha, efficient under Ho; obtained from xtreg Test: Ho: difference in coefficients not systematic chi2(4) = (b-B)'[(V_b-V_B)^(-1)](b-B) = 27.18 Prob>chi2 = 0.0000 62 63 Table C-3 Result of Hausman Test for Equation (4.1c) Coefficients (b) (B) FEp2 REp2 y g Gi_y Yi_g -1.704427 950357 2.843275 -.0720757 (b-B) Difference -.3179159 3691171 -.5650993 1.166601 -1.386511 5812399 3.408374 -1.238676 sqrt(diag(V_b-V_B)) S.E .4941882 6823927 1.210322 4227499 b = consistent under Ho and Ha; obtained from xtreg B = inconsistent under Ha, efficient under Ho; obtained from xtreg Test: Ho: difference in coefficients not systematic chi2(4) = (b-B)'[(V_b-V_B)^(-1)](b-B) = 27.17 Prob>chi2 = 0.0000 Table C-4 Result of Hausman Test for Equation (4.2a) Coefficients (b) (B) FElnP0 RElnP0 lnY lnG lnY_lnG -6.356905 1.307059 915869 -7.680991 -.8187542 1.208626 (b-B) Difference 1.324086 2.125813 -.2927568 sqrt(diag(V_b-V_B)) S.E 2.015256 2.799852 5873705 b = consistent under Ho and Ha; obtained from xtreg B = inconsistent under Ha, efficient under Ho; obtained from xtreg Test: Ho: difference in coefficients not systematic chi2(3) = (b-B)'[(V_b-V_B)^(-1)](b-B) = 6.97 Prob>chi2 = 0.0727 63 64 Table C-5 Result of Hausman Test for Equation (4.2b) Coefficients (b) (B) FElnP1 RElnP1 lnY lnG lnY_lnG -7.932932 1.365335 1.13345 -9.403663 -.8947978 1.473485 (b-B) Difference 1.470732 2.260132 -.3400349 sqrt(diag(V_b-V_B)) S.E 2.248967 3.124194 654625 b = consistent under Ho and Ha; obtained from xtreg B = inconsistent under Ha, efficient under Ho; obtained from xtreg Test: Ho: difference in coefficients not systematic chi2(3) = (b-B)'[(V_b-V_B)^(-1)](b-B) = 5.06 Prob>chi2 = 0.1678 Table C-6 Result of Hausman Test for Equation (4.2c) Coefficients (b) (B) FElnP2 RElnP2 lnY lnG lnY_lnG -10.3634 -.5192625 1.678366 -11.09707 -1.795916 1.806577 (b-B) Difference 7336698 1.276654 -.1282117 sqrt(diag(V_b-V_B)) S.E 2.50746 3.480888 7283355 b = consistent under Ho and Ha; obtained from xtreg B = inconsistent under Ha, efficient under Ho; obtained from xtreg Test: Ho: difference in coefficients not systematic chi2(3) = (b-B)'[(V_b-V_B)^(-1)](b-B) = 3.56 Prob>chi2 = 0.3130 64 65 APPENDIX D: REGRESSION RESULTS Table D-1 Estimation Results of equation (4.1a) Fixed-effects (within) regression Group variable: countryid Number of obs Number of groups = = 50 R-sq: Obs per group: = avg = max = 6.3 12 within = 0.8367 between = 0.4937 overall = 0.6651 corr(u_i, Xb) F(4,38) Prob > F = 0.0547 = = p0 Coef y g Gi_y Yi_g _cons -.6932427 0048449 0591558 8637231 -19.4533 3444265 5057791 8458728 3600026 2.659541 sigma_u sigma_e rho 13.768617 10.033675 65314443 (fraction of variance due to u_i) F test that all u_i=0: Std Err F(7, 38) = t -2.01 0.01 0.07 2.40 -7.31 P>|t| 0.051 0.992 0.945 0.021 0.000 6.06 48.68 0.0000 [95% Conf Interval] -1.390498 -1.019051 -1.653224 1349359 -24.83725 0040122 1.028741 1.771536 1.59251 -14.06934 Prob > F = 0.0001 Source: Author’s calculation Table D-2 Estimation Results of equation (4.1b) Fixed-effects (within) regression Group variable: countryid Number of obs Number of groups = = 50 R-sq: Obs per group: = avg = max = 6.3 12 within = 0.7908 between = 0.2156 overall = 0.4549 corr(u_i, Xb) F(4,38) Prob > F = -0.1708 = = p1 Coef y g Gi_y Yi_g _cons -1.411785 6601898 1.98817 2311069 -32.71318 3691258 5420493 9065317 385819 2.850261 sigma_u sigma_e rho 17.956213 10.753206 73603564 (fraction of variance due to u_i) F test that all u_i=0: Std Err t -3.82 1.22 2.19 0.60 -11.48 F(7, 38) = 8.46 Source: Author’s calculation 65 P>|t| 0.000 0.231 0.034 0.553 0.000 35.90 0.0000 [95% Conf Interval] -2.159042 -.4371316 1529929 -.5499428 -38.48323 -.6645292 1.757511 3.823348 1.012157 -26.94313 Prob > F = 0.0000 66 Table D-3 Estimation Results of equation (4.1c) Fixed-effects (within) regression Group variable: countryid Number of obs Number of groups = = 50 R-sq: Obs per group: = avg = max = 6.3 12 within = 0.7457 between = 0.1486 overall = 0.3478 corr(u_i, Xb) F(4,38) Prob > F = -0.2703 = = p2 Coef y g Gi_y Yi_g _cons -1.704427 950357 2.843275 -.0720757 -41.49734 3920296 5756827 9627807 4097585 3.027116 sigma_u sigma_e rho 20.162728 11.420428 75710343 (fraction of variance due to u_i) F test that all u_i=0: Std Err F(7, 38) = t -4.35 1.65 2.95 -0.18 -13.71 P>|t| 0.000 0.107 0.005 0.861 0.000 27.86 0.0000 [95% Conf Interval] -2.498049 -.2150518 8942268 -.9015885 -47.62542 9.11 -.9108043 2.115766 4.792322 7574371 -35.36927 Prob > F = 0.0000 Source: Author’s calculation Table D-4 Estimation Results of Equation (4.2a) Random-effects GLS regression Group variable: countryid Number of obs Number of groups = = 56 R-sq: Obs per group: = avg = max = 7.0 13 within = 0.8157 between = 0.9882 overall = 0.9471 Random effects u_i ~ Gaussian corr(u_i, X) = (assumed) Wald chi2(3) Prob > chi2 lnP0 Coef Std Err z lnY lnG lnY_lnG _cons -7.680991 -.8187542 1.208626 20.24074 2.377295 2.75332 6372465 10.14815 sigma_u sigma_e rho 08492484 32776702 06291008 (fraction of variance due to u_i) -3.23 -0.30 1.90 1.99 Source: Author’s calculation 66 P>|z| 0.001 0.766 0.058 0.046 = = 713.27 0.0000 [95% Conf Interval] -12.3404 -6.215163 -.0403543 3507432 -3.02158 4.577654 2.457606 40.13074 67 Table D-5 Estimation Results of Equation (4.2b) Random-effects GLS regression Group variable: countryid Number of obs Number of groups = = 56 R-sq: Obs per group: = avg = max = 7.0 13 within = 0.8506 between = 0.9914 overall = 0.9579 Random effects u_i ~ Gaussian corr(u_i, X) = (assumed) Wald chi2(3) Prob > chi2 lnP1 Coef Std Err z lnY lnG lnY_lnG _cons -9.403663 -.8947978 1.473485 22.37149 2.572031 2.961704 6885865 10.93109 sigma_u sigma_e rho 08100429 36599089 0466988 (fraction of variance due to u_i) -3.66 -0.30 2.14 2.05 P>|z| 0.000 0.763 0.032 0.041 = = 957.00 0.0000 [95% Conf Interval] -14.44475 -6.699631 1238798 9469584 -4.362575 4.910035 2.823089 43.79603 Source: Author’s calculation Table D-6 Estimation Results of Equation (4.2c) Random-effects GLS regression Group variable: countryid Number of obs Number of groups = = 56 R-sq: Obs per group: = avg = max = 7.0 13 within = 0.8568 between = 0.9933 overall = 0.9610 Random effects u_i ~ Gaussian corr(u_i, X) = (assumed) Wald chi2(3) Prob > chi2 lnP2 Coef lnY lnG lnY_lnG _cons -11.09707 -1.795916 1.806577 26.62826 2.734693 3.120586 7307812 11.54163 sigma_u sigma_e rho 06291415 40253777 02384526 (fraction of variance due to u_i) Std Err z -4.06 -0.58 2.47 2.31 Source: Author’s calculation 67 P>|z| 0.000 0.565 0.013 0.021 = = 1133.03 0.0000 [95% Conf Interval] -16.45697 -7.912153 3742725 4.007086 -5.737167 4.32032 3.238882 49.24944 68 APPENDIX E: ESTIMATION OF GROWTH ELASTICITY OF POVERTY Table E-1: Estimated Coefficients of equation (3.1.3) Coefficient P0 P1 P2 b1 -7.68 -9.40 -11.10 b3 1.21 1.47 1.81 Source: Author’s calculation Table E-2: Point Estimates of Growth Elasticity of Poverty Country lnG P0 P1 P2 Whole Region 3.67 -3.25 -4.00 -4.47 Cambodia 3.68 -3.24 -3.98 -4.45 Indonesia 3.44 -3.53 -4.34 -4.89 Lao DPR 3.51 -3.43 -4.23 -4.75 Malaysia 3.83 -3.05 -3.75 -4.17 Philippines 3.77 -3.12 -3.84 -4.28 Thailand 3.76 -3.13 -3.86 -4.30 Timor-Leste 3.57 -3.37 -4.14 -4.65 Vietnam 3.59 -3.35 -4.12 -4.62 Source: Author’s calculation Notes: The growth elasticity of poverty is calculated by using the estimated coefficients of lnY (b1) and lnYlnG (b3) The values of lnG used for computing point estimates is obtained from the sample mean The values of lnG used for calculating interval estimates are the max and value of the sample 68 69 Table E-3: Interval Estimates of Growth Elasticity of Poverty P0 Country lnGmin P1 P2 lnGmax max max Max Whole Region 3.37 3.89 -2.97 -3.61 -3.66 -4.44 -4.06 -5.01 Cambodia 3.58 3.79 -3.10 -3.35 -3.82 -4.12 -4.25 -4.62 Indonesia 3.37 3.57 -3.36 -3.61 -4.14 -4.44 -4.64 -5.01 Lao DPR 3.42 3.60 -3.33 -3.55 -4.09 -4.37 -4.59 -4.93 Malaysia 3.64 3.89 -2.97 -3.29 -3.66 -4.05 -4.06 -4.53 Philippines 3.70 3.83 -3.05 -3.20 -3.76 -3.95 -4.17 -4.40 Thailand 3.67 3.87 -3.01 -3.24 -3.70 -3.99 -4.11 -4.46 Timor-Leste 3.46 3.68 -3.24 -3.49 -3.99 -4.30 -4.45 -4.84 Vietnam 3.57 3.63 -3.30 -3.37 -4.06 -4.14 -4.55 -4.65 Source: Author’s calculation Notes: The terms “min” and “max” in this table refers to and max of absolute value of the elasticity 69 ... conflicting points of view, this thesis is intending to identify the role of economic growth and inequality in terms of poverty reduction in the case of SouthEastern Asian countries This thesis... that thesis entitled ? ?The Role of Growth and Income Distribution in Poverty Reduction: The Case of South- Eastern Asian Countries? ??, which is submitted by me in fulfillment of the requirement for the. .. DEVELOPMENT ECONMICS THE ROLE OF GROWTH AND INCOME DISTRIBUTION IN POVERTY REDUCTION: THE CASE OF THE SOUTH- EASTRN ASIAN COUNTRIES by Hồ Quốc Tuấn A Thesis Submitted in Partial Fulfillment of the Requirements